Agefi Luxembourg - février 2025

AGEFI Luxembourg 38 Février 2025 Droit / Emploi By Jean-Philippe SMEETS, Partner,Ashurst TransformingLuxembourg’sCorporateLegal Landscape:AComprehensiveExaminationof TheKeyBillsThatShouldBeAdoptedin2025 L uxembourg is poised for a signi- ficant transformation in its corpo- rate legal frameworkwith the expected implementation of four pivotal bills in 2025. These legislative proposals, ofwhichBill of law8053 was recently adoptedby the Luxembourg Parliament in a first vote on 23 January 2025with the dispense from the second vote having been obtained on 4 February 2025, are currently under consideration. They fore- most aimto enhance corporate governance, transparency, and regulatory compliance. This overviewdelves into the intricacies of eachbill, highlighting their potential impact on enterprises operatingwithin andbeyond Luxembourg. Bill of Law8217: Duty of Care for Enterprises OnMay16,2023,LuxembourgintroducedBillofLaw 8217 ( Bill 8217 ), a new legislative proposal, which aims to mandate certain Luxembourg entities en- gagedineconomicactivitiestoadheretospecificduty of careobligations concerningsustainability. Bill 8217 (when adopted) will be relevant for enterprises that meet at least two of the following criteria: (a) having 250 or more employees, (b) an annual turnover ex- ceeding EUR 50 million, and (c) a total balance sheet over EUR 43million. Additionally, certain small and medium-sized enterprises engaged in high-risk eco- nomic activities, as defined by a grand-ducal regula- tion, will also be subject thereto. The newdutyof care resulting fromBill 8217will ex- tend beyond the in-scope entities’ immediate opera- tions to include their entire value chains. This means that in-scopeentitieswill alsohave toconsider theac- tivities of their suppliers, subcontractors and other business partners. Indeed, the broad definition of “business relations” in Bill 8217 includes any entities linkedtotheactivitiesofin-scopeentities,suchasthose involved infinancing, insurance and re-insurance on theirbehalf.ThecoreofBill8217liesinitscomprehen- sive duty of care obligations. In-scope entities are required to assess the impact of their activities onhuman rights and the environment bothinandoutsideLuxembourg(whilealsoassessing the activities of their subsidiaries and any entity they havebusinessrelationswith(seeabove)).Thisassess- mentmustbethoroughandmustidentifybothactual andpotentialnegativeimpacts.Ifanynegativeimpact is identified, in-scope entities must take all necessary measures to prevent, mitigate or remedy those im- pacts. In certain exceptional circumstances, theymay have to suspend, or even terminate, the relevant ac- tivitieswithin a reasonable periodof time. This should includewithout limitation: - drawing up a vigilance plan that involves all levels of management of the relevant entity, describing the mechanismsimplementedtocomplywiththeentity’s newduties of care; and -implementingamechanismforreceivingreportson theexistenceoroccurrenceofriskswitheffectiveguar- antees of protection forwhistle-blowers ; - providing a complaints service on theirwebsite, en- suring that complaints are answered within one month; and - implementing a follow up process concerning the actions taken and evaluationof their efficiency. Non-compliance with the obligations set out in Bill 8217couldresultinsignificantconsequencesforfirms once it passes into law. In-scope entities found to be in breach of their duty of care will incur civil liability andtheobligationtopaycompensationforanydam- age caused. Inparticular: - Trade unions and civil society organisations acting in the public interest will be able to initiate collective actionsonbehalfofvictimsagainstanyin-scopeentity inbreachof the law. - Bill 8217 will introduce a reversal of the burden of proof, ie if an in-scope entity is accused of breaching itsdutyofcare,itmustprovethatittookallnecessary measurestopreventormitigateanynegativeimpacts. Theseprovisions aimtoensure that in-scope entities take their duty of care obligations seriously and im- plement robust measures to protect human rights and the environment. Finally, anewsupervisoryauthority (the Authority ) will be created to enforce compliancewith Bill 8217. The Authority will commence investigations on its own initiativeor inresponse tocomplaints fromany natural or legal person. It may request information fromthein-scopeentitiesandimposeadministrative fines for non-compliance. These fines could be as high as 10% of an enterprise’s net turnover, which should prove a strong incentive for in-scope entities to adhere to their duty of care obligations. BillofLaw8342:DirectorVerification andCorporate Transparency Submitted on November 24, 2023, Billoflaw8342( Bill8342 )aims to bolster the protection of individualsinteractingwith companies by enhancing the verification process for directors and improving the quality of information in the Luxembourg Trade and CompaniesRegister(RCS).Bill 8342 aims to transpose article 13deciesofDirective(EU)2019/1151 intoLuxembourglaw,therebystrength- ening corporate transparency and accountability. One of the key provisions of Bill 8342 is the contem- plated empowerment of the Luxembourg Business Register ( LBR ) to verify, through the Business Regis- ters Interconnexion System ( BRIS ), whether a pro- posed director is subject to any management ban in anotherMemberState.Thisverificationprocessiscru- cial in preventing individuals with a history of man- agement bans fromassuming directorial positions in theGrand-Duchyof Luxembourg. TheLBRwill also beauthorizedtorefuseorderegisterdirectorswhoare banned inotherMember States. To further enhance the overall quality and complete- nessofinformationintheRCS,Bill8342mandatesthe inclusion of additional details such as personal and professional addresses, names, and dates of birth of individuals subject to management bans. This in- creased transparency is expected to improve, when Bill8342isadopted,thereliabilityoftheRCSandpro- tect stakeholders from fraudulent or abusive be- haviour and more generally increase transparency and accountability in corporate governance. The scope of Bill 8342 extends to public limited com- panies, partnerships limitedby shares, and limited li- abilitycompanies. It alsoapplies topositionswith the power to bind a company, such as managers, audi- tors,andstatutoryauditors,ensuringcomprehensive coverage of key corporate roles. Furthermore, mea- surestoensurethattheinformationintheRCSisreg- ularly updated will be introduced when Bill 8432 enters into force. This includes requiring companies topromptlynotify the register of anychanges in their directorsorotherkeyroles.Bymaintainingup-to-date information,theRCScanprovideamoreaccurateand reliable resource for stakeholders. The enhancedver- ificationprocessandimprovedinformationqualityin the RCS are expected to have a significant impact on corporate governance inLuxembourg. Bill of Law8053: Overhaul of Mergers andDivisions Procedures As mentioned above, Bill of law 8053 was recently adopted by the Luxembourg Parliament on 23 Jan- uary2023andthedispensefromthesecondvotewas obtained on 4 February 2025 (the “ New Law ”). The exact date of entry into force of the New Law is not knownyetasthepublicationoftheNewLawhasnot occurred so far. The NewLawwill revamp the legal proceduresformergersanddivisionsundertheLux- embourglawofAugust10,1915,andintroduceanew regime for cross-border conversions. The New Law aimstosimplifyandclarifytheproceduresforinternal and cross-border restructurings, making themmore flexible and transparent. Under a so-called “General Regime”, the NewLaw introduces severalmodifications to the existingLux- embourg restructuring procedures. For instance, it will exempt single-shareholder companies fromthe requirementtoobtainanexpertreportonrestructur- ingplans. Theeffectivenessofmergers anddivisions willbedefinedinthefuturebasedonthepublication of general meeting minutes or notary certificates, streamlining the process and reducing administra- tive burdens. The General Regime under the New Law also in- cludesnewprovisionstosimplifythetermsofrestruc- turing plans and publication requirements. This includes deleting certain provisions that apply to cross-border restructurings, thereby reducing the complexityoftheprocess.Thegeneralmeetingsofthe companies involved in the restructuringmay decide tomodify the restructuring plan andmake the effec- tiveness of the restructuring subject to certain condi- tionsor time limits. TheNewLawwill also introduce specificprovisionsfordifferenttypesofrestructurings for mergers, divisions and cross-border conversions under theGeneral Regime. Formergers, the definition of mergers by absorption willbeextendedtoincludeupstreammergers(where a company transfers its assets and liabilities to itspar- entcompany)andside-streammergers(whereacom- pany transfers its assets and liabilities to an existing companywithoutissuingnewshares).Thesechanges aim to make the legal rules more flexible and clarify theproceduresfordifferenttypesofmergers.Withre- spect to divisions of companies, the New Law will clarify that the division will only take effect against third parties upon publication of the extraordinary general meeting minutes of the company being di- vided.Thisshouldensurethatallstakeholdersarein- formedofthedivisionandcantakeappropriateaction indue time if necessary. The new regime for cross-border conversions under theGeneralRegimetobeintroducedbytheNewLaw will aimto facilitate the conversionof companies and economic interest groupings governed by Luxem- bourglawintoentitiesgovernedbyforeignlaws,and vice versa. The newregimewill apply to conversions that do not fall within the scope of Regulation (CE) 2157/2001 regulating European Companies or the Special Regime only. The conversionmay be carried outwithoutdissolution,liquidation,orwindingupof the Luxembourg entity, provided that this is permis- sible under the foreign law. Aso-called“Special Regime”will harmonizeproce- dures for mergers, divisions, and cross-border con- versions within the scope of EU rules. This regime willapplytospecificcompanyforms,includingpub- lic limited companies, limited liability companies, andpartnerships limitedby shares,while excluding certain entities like co-operative companies and UCITS. The Special Regime intends to ensure that cross-border restructurings are carried out in com- pliancewithbothLuxembourg andEUregulations, providing a clear framework for companies operat- ing across borders. The Special Regime further in- cludes specific provisions for different types of restructurings. Formergers, the Special Regimewill apply to the same types of mergers as the General Regime, includingupstreamandside-streammerg- ers.However,itwillnowapplyevenifthecashcom- pensation exceeds 10% of the nominal or par value of the company resulting fromthemerger. The date of effectiveness of themergerwill be determined by the laws of the country governing the company re- sulting from themerger. For divisions, the Special Regime will apply to com- plete divisions (where a company transfers its entire patrimony to twoormorenewly constitutedcompa- nies), partial divisions (where a company transfers partofitspatrimonytooneormorenewlyconstituted companies), and divisions by separation (where a company transfers part of its patrimony to one or more recipient companies). However, the Special Regime will not apply to total or partial divisions to pre-existingcompaniesormixeddivisionswhere the patrimony is distributed to both pre-existing and newly constituted companies. The Special Regime for European cross-border con- versions will apply to conversions meeting specific conditions, including the conversion of a company established in Luxembourg into a company of an- otherEUMemberState,orviceversa.Theconversion mustinvolvethetransferofthecompany’sregistered office to the EU Member State of destination and must not result in the dissolution, liquidation, or windingupof the company. The lawsof the country of destination determine the date of effectiveness of thecross-borderconversion.TheNewLawfinallyin- cludes certain provisions for the transfer of assets, branchofactivitytransfers,andallassetsandliabilities transfers. These provisions will apply to special lim- itedpartnerships and ensure that the Special Regime relating to divisions is applicable in cases where the operationmaybequalifiedasadivisionbyseparation. Unfortunately(fromaLuxembourglawperspective), the New Lawmay complexify cross-border restruc- turings fallingwithin the scope of the Special Regime – despite its stated ambition to make cross-border mergers,divisionsandconversionsmoreflexibleand transparent. Bill of Law8296: National Merger Control Regime Billoflaw8296( Bill8296 ),submittedinAugust2023, will introduce a merger control regime in Luxem- bourg, aligning with Council Regulation (EC) No 139/2004of 20 January2004on the control of concen- trations betweenundertakings,whichLuxembourg in contrast to many other EU Member States does not yet have. Bill 8296 marks a significant step to- wards regulatingcontrol onconcentrationsbetween undertakings, ensuring that mergers and acquisi- tionsdonot adverselyaffect competition in theLux- embourgmarket. Bill 8296defines a concentrationas themerger of two ormoreindependentundertakings,theacquisitionof controloveranotherundertaking,ortheformationof a full-function joint venture. It will apply to transac- tionsmeeting specific turnover thresholds: (a) a com- binedturnoverofEUR60millioninLuxembourgand (b) an individual turnover of EUR 15 million for at least two undertakings. These thresholdswill ensure that only significant transactions are subject to scrutiny, preventing undue regulatory burdens on smallerenterprises.Furthermore,controlisdefinedas theabilitytoexercisedecisiveinfluenceoverthebusi- ness of an undertaking, whether through rights of ownership,contracts,orothermeans.Thisbroaddefi- nitionwill ensure that themerger control regime can capture a wide range of transactions that may affect competition. Bill 8296 also specifies that internal re- structurings will not be subject to the merger control regime, provided they do not lead to changes in the structure of control. Another notable provision of Bill 8296 is themanda- tory notification requirement for qualifying transac- tions.Thiswillensurethatthecompetentcompetition authority is informedof potential concentrations and can assess their impact on competition. Bill 8296 also allows the competitionauthority to investigate trans- actions that fall belowthe thresholds if they are likely to restrict competition, providinga safeguardagainst anti-competitive practices. Furthermore, Bill 8296 also takes into account the specificnatureof Luxembourg’sfinancial sector, ex- cluding transactions by investment funds, securiti- sationvehicles,andpensionfunds,exceptforprivate equity transactions. This exclusion recognizes the unique characteristics of these entities and ensures that the merger control regime is appropriately tai- lored to the Luxembourg market. Once passed the new law will complement the existing framework providingforamechanismforthenationalscreening offoreigndirectinvestmentslikelytounderminena- tional security or public order (the “ FDI Law ”). The FDI Law, which came into full effect on September 1, 2023 implementingRegulation (EU) 2019/452,will remain fully applicable. Inconclusion,thesefourbillscollectivelyaimtofortify Luxembourg’scorporategovernanceframework,en- suring greater accountability, transparency, and reg- ulatory compliance. Main corporate law bills of law L e nombre de demandeurs d’emploi ré- sidents disponibles inscrits à l’ADEM s’élève à 19.532 au 31 décembre 2024, enhausse de 1.334 personnes (soit 7,3%) par rapport aumois de décembre 2023. Cette hausse concerne notamment les deman- deurs d’emploi inscrits 7 mois et plus, les deman- deurs d’emploi de plus de 30 ans, ainsi que les demandeurs d’emploi les plus qualifiés (diplô- més de l’enseignement supérieur). Au niveau des métiers, les hausses les plus importantes concer- nent les métiers de la conduite du transport rou- tier, de la comptabilité, de la production culi- naire, de l’informatique, et de la banque. Le taux de chômage, corrigé des variations sai- sonnières, calculé par le STATEC, reste stable à 5,9%. Le nombre de nouvelles inscriptions de demandeurs d’emploi augmente légèrement. En effet, 2.328 résidents se sont inscrits à l’ADEM au cours du mois de décembre 2024, soit une hausse de 50 personnes ou de 2,2% par rapport à décembre 2023. A noter que les nouvelles ins- criptions de ce mois comprennent 62 inscriptions de bénéficiaires de la protection temporaire (réfugiés venant d’Ukraine). Le nombre de demandeurs d’emploi résidents qui bénéficient de l’indemnité de chômage complet a progressé de 917 personnes ou de 9,3% sur un an, pour s’établir à 10.737 au 31 décembre. Le nombre de bénéficiaires d’une mesure en faveur de l’emploi s’établit à 4.111, stable comparé à décembre 2023. Au cours du mois de décembre 2024, les employeurs ont déclaré 2.385 postes vacants à l’ADEM, soit une baisse de 7,1% par rapport à décembre 2023. Le nombre total de postes dis- ponibles à la fin du mois s’établit à 5.935 au 31 décembre 2024. Le recul sur un an est de 15,2%. Cette baisse impacte surtout les métiers de la comptabilité et du second oeuvre du bâtiment. Source : ADEM Près de 20.000 demandeurs d’emploi au Luxembourg © iStock